Air France optimistic after July figures

Referenced Symbols

LONDON (CBS.MW) -- Oil majors were well bid on Friday to help European markets near the end of a volatile week of trade close to where they started.

The German DAX Xetra 30 index (1876534) eased 0.3 percent to 3,322 and the French CAC 40 index (1804546) increased 1.1 percent to 3,176. The FTSE 100 in London was also higher. See story on London markets.

For the week, the CAC 40 has seen a slight gain while the DAX 30 was off around 3 percent.

The Dow Jones Euro Stoxx 50, which composes stocks of several euro-denominated countries, was less than 1 percent higher for the week.

A rally in McDonald's shares as well as recovery in the Treasury market helped lift U.S. markets on Friday. See story on U.S. markets.

The euro was at $1.1323 vs. the U.S. dollar, a slight decline on the day.

On the economic front, Italy was in a recession after its second quarter GDP shrank 0.1 percent, an expected result. Italy's stock market index, the MIB-30, rose 0.7 percent.

The oil majors were doing well on the back of high oil prices, as Total (012027)
TOT,
+5.71%,
Royal Dutch (00947)
RD
and Eni (313247)
E,
+5.61%
all see strong gains. Brent crude oil prices in London held above $30 per barrel in IPE trade.

In addition, Statoil (009698)
STO,
+1.59%
rose 3.8 percent after finding Norwegian Sea oil, although the company said it does not know yet if it can be produced or is recoverable.

However, early morning tech sector gains did not hold in the face of selling pressure in the U.S. Chip stocks Infineon Technologies (623100)
IFX,
+4.84%
and STMicroelectronics (012970)
STM,
+1.19%
saw losses around 1 percent, while handset maker Nokia
NOK,
+4.20%
picked up 1.5 percent and IT consulting group Cap Gemini (012533) rose 0.8 percent.

Royal Ahold (33181)
AHO
declined 1.3 percent after it said that banks have extended the deadline for the delivery of audited 2002 financial statements to September 30, 2003 from August 15. Ahold said it "in consultation with its auditors, Deloitte & Touche, Ahold has concluded that this process is taking longer than expected."

Ahold also reported a second quarter sales decline of 12.4 percent to 13 billion euros, although it saw 1.3 percent organic growth after excluding foreign currency impact. See story on Ahold.

The German Finance Minister Hans Eichel was incensed over a French government request to support the French government's bid to aid, the Financial Times reported Thursday, citing anonymous German officials. Eichel himself told the newspaper that he received a request for the French state bailout plan from French Finance Minister Francis Mer, but declined to comment further.

Mer also called counterparts in the U.K., Spain and Luxembourg, but the newspaper did not elaborate on those conversations. German finance ministry officials said that they had several companies in their own country facing financial difficulties that will not receive government help, making them disinclined to support the French bid.

Air France sees better North and South American traffic

Air France (003112) climbed 1.6 percent as it said late Thursday that July passenger traffic increased 2.9 percent, helping its load factor increase 1.4 points to 79.4 percent. "With the exception of Asia, where the situation is improving although it remains impacted by the consequences of the SARS epidemic, traffic reached substantially higher levels than last year," the airline said.

North American traffic saw 12.1 percent growth for a 6.7 percent increase in capacity, Latin American traffic rose 21.2 percent on a 12.9 percent increase in capacity, Asian traffic slid 19.5 percent on a 15.9 percent drop in capacity and its Middle Eastern/African routes were steady as both passengers and capacity dropped 5.4 percent. Domestically, traffic eased 0.9 percent after a 4.1 percent drop in capacity, which helped to boost load factor to 67.9 percent.

Meanwhile, Swedish airline SAS (000080557) rose 1.5 percent after it reported a 5.9 percent decline in July traffic to 2.5 million passengers and said load factor eased 1.1 points to 70.6 percent. "Forceful cost measures are under implementation to secure a sustained profitability level in a lower yield environment. Due to the situation with continued weak economies, the outlook remains cautious," the airline said.

Exchange rivals

Exchange operator Deutsche Boerse (581005) increased 1.2 percent as it said second quarter EBIT rose 44 percent to 115.3 million euros, and sales before consolidating Clearstream results increased 8 percent, or a 71 percent jump to 351.9 million euros after consolidating the results. The figures came in at the low end of analyst estimates.

Derivatives exchange Eurex sales rose 41.1 percent to 103.9 million euros, and its EBIT more than doubled to 59.7 million euros. Xetra sales eased 3 percent to 50.4 million euros due to lower trading floor revenue even though the electronic order book revenues increased. Nonetheless, Xetra EBIT rose 43.7 percent to 6.9 billion euros.

Euronext (005777) was flat, as the newspaper Boesen-Zeitung said Deutsche Bourse and the London Stock Exchange (LSE) were pitching for Euronext's Amsterdam business, which contributed 27 percent of the exchange's volumes. The London exchange was 0.7 percent higher.

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Steven Goldstein is based in London and responsible for MarketWatch's coverage of financial markets in Europe, with a particular focus on global macro and commodities. Previously, he was Washington bureau chief, directing MarketWatch's economic, political and regulatory coverage. Follow Steve on Twitter: @MKTWgoldstein.

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